The Importance of Credentialing
The process of credentialing refers to both obtaining approval for a provider to practice at a hospital (i.e. privileging) and to be reimbursed for services by a particular payer. Both processes require satisfying many criteria, including proof of identify, education, training, licensing and board certification, as well as verifying malpractice insurance and reviewing any claims or investigations of fraud, abuse or misconduct. A robust, comprehensive credentialing program is key for every healthcare provider organization.
Credentialing helps to ensure providers are qualified to provide high quality care, a key piece of patient safety. A lapse in credentialing status can be a violation of payer contracts, potentially jeopardizing revenue from payers and other federally funded programs. A lapse also exposes hospitals to possible negligence and malpractice claims, which can be costly to an organization’s reputation and finances. Further, failing to institute proper quality controls can reduce revenue in a value based reimbursement environment, a source of revenue that is likely to continue to grow.
Deciding Your Credentialing Approach: Balancing Investment and Control
Deciding whether to outsource credentialing or manage the process in house depends on your organization’s ability to invest time and resources as well as the organization’s desire to have control over the process.
Organizations willing to invest heavily in resources and technology in exchange for the most control should consider pursuing a delegated in house credentialing model. This option typically makes the most sense for large organizations. Investing in this model requires hiring and training credentialing staff to remain current on accreditation standards and payer contracts, maintaining the proper staff to provider ratio, as well as supporting an internal audit team. Technology is needed for internal Key Performance Indicator (KPI) monitoring, automated tracking of payer contracts, and provider documentation due dates. System integration is also critical to provide an accurate, real-time list of providers across all platforms.
Pursuing the non-delegated path requires less investment, but requires dependence on payer timelines to credential physicians. A dedicated department or individual, depending on the size of your organization, is needed to maintain this process for the provider, and should still be supported by an internal tracking system of payer contracts and due dates.
Outsourcing requires minimal investment in technology, hiring and training, but depends on the vendor to credential physicians. Technology and training are managed externally in exchange for a vendor fee. Clear processes and vendor management responsibility will need to be established and maintained, but require the least time and energy once the vendor has been selected and implemented, assuming the vendor follows processes as expected.
Managing the Credentialing Life Cycle
Staying on top of the credentialing life cycle is critical to maintaining compliance, accelerating physician onboarding, and preventing lapses in credentialed status.
To accelerate incoming physicians’ ability to gain credentials, coordinate with physician recruitment to make start dates contingent on submission of credentialing documents. Beginning with prospective candidates, providers should be aware of the credentialing process and what they will need to accomplish before seeing patients, including any required documents and expected timelines. As soon as they have accepted their offer, new physicians should begin the credentialing process. Coordinate with payers early by sending out prepared contracts when final offers are given to prospective physicians.
Preventing a lapse in credentialing status starts with an internal work-queue of anticipated or known due dates for credentialing activities. To emphasize the importance of current credentialing, appoint physician champions to promote credentials maintenance and encourage timely submission of documents. Develop a relationship with payer contacts to keep communication channels open, stay on top of deadlines, and have a forum to escalate potential issues. Coordinate with internal mail delivery systems to ensure timely distribution of hardcopy notifications from payers.
Organizational Controls to Monitor the Credentialing Process
Once the credentialing approach has been decided and processes have been established throughout the credentialing life cycle, controls should be put in place to monitor, maintain, and correct issues as they arise.
Particularly for organizations with delegated credentialing from payers, remaining audit-ready is critical to protecting revenue, and begins with internal strategies to establish, educate, and enforce organizational credentialing priorities. A policy and procedure committee should maintain organizational policies based on regulations, accreditation standards, and payer contracts and communicate them to staff in a timely fashion. This is critical to organizational awareness and alignment on credentialing requirements. An internal audit group of independent auditors with knowledge and expertise of audit processes, all relevant policies and procedures, and audit templates can provide objective feedback to keep the organization ready for the real deal. A process for escalating and monitoring providers who are at risk should be installed, with provisions to terminate providers who do not maintain appropriate status. Formal training during onboarding and periodic refreshers for existing employees should use lessons learned from past audits as training points to avoid repeating mistakes.
Understanding the health of an organization’s credentialing process requires establishing credentialing KPIs and monitoring them against benchmark values. Average credentialing time should be monitored to reduce onboarding time for new physicians, reduce risk of a lapse in credentialed status, and maximize physician productive time. Organizations should strive to stay below the industry target of 60 days average credentialing time, and take immediate corrective action if this KPI exceeds 90 days.
Tracking denials and adjustments related to credentialing is a useful indicator for measuring effectiveness of the credentialing process. This can be done by generating a report on the total number of claims denied and number of accounts written off due to incomplete credentialing. Finally, a lapse in credentialed status for physicians in your organization indicates a breakdown in the re-credentialing process, which should be reexamined to determine where the breakdown occurred and how to resolve it going forward.
About the Authors: This post was authored by Emily Anne Nolte, CHFP – Manager, PwC; Lauren Christian, CHFP – Manager, PwC; and Spencer Budd – Associate, PwC.
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